Falling inflation in German states points to national decline

FILE PHOTO: A general view shows the Berlin skyline, Germany, December 26, 2020. REUTERS/Michele Tantussi/File Photo

BERLIN (Reuters) – Inflation fell in six economically important German states in February, preliminary data showed on Thursday, suggesting that German inflation is continuing on its downward trajectory.

The inflation rate in North Rhine-Westphalia, Germany’s most populous state, fell to 2.6% in February from 3.0% in January.

Saxony and Baden-Wuerttemberg saw the largest dips, falling to 3.0% from 3.5%, and to 2.7% from 3.2%, respectively. Those states were followed by Bavaria, where the rate fell to 2.6% from 2.9%, Brandenburg, with a fall to 3.5% from 3.7%, and then Hesse, at 2.1% from 2.2% the month before.

Economists polled by Reuters forecast Germany’s harmonised inflation at 2.7% in February, down from 3.1% in January.

National inflation data for February is being published by individual euro zone countries before the EU-wide release slated for Friday, which is expected to show headline inflation slowing to 2.5% year-on-year in February from 2.8% in January.

Spanish data on Thursday showed EU-harmonised inflation falling to 2.9% in February from 3.5%, while French data showed inflation slowing slightly, to 3.1% from 3.4% in January.

(This story has been corrected to show that the French inflation slowed to 3.1%, instead of rising more than expected, in paragraph 6)

(Reporting by Miranda Murray, Editing by Rachel More)